SAMTEL INDIA LIMITED vs. PRINCIPAL COMMISSIONER OF INCOME TAX, & ORS.

O R D E R % 24.08.2026

the Assessing Officer (AO) on 09.12.2009, whereafter proceedings under Section 148 of the Act of 1961, were initiated against the petitioner and by way of assessment order dated 27.12.2013 passed under Section 143(3)/147 of the Act of 1961, demand was raised, which was unsuccessfully challenged by the assessee before the Commissioner of Income Tax (Appeal)-8 (hereinafter referred to as ‘CIT(A)’) vide order dated 27.01.2015. Thereafter, the petitioner preferred an appeal before the Income Tax Appellate Tribunal (hereinafter referred to as ‘the Tribunal’), which was allowed by the Tribunal vide its order dated 12.02.2025, whereby the Tribunal held that the reassessment proceedings were illegal, as the petitioner’s regular assessment was made under Section 143(3) of the Act of 1961 and the AO’s action was based on a mere change of opinion.

order are also liable to be quashed. He submitted that the penalty order is not only incidental, but totally dependent upon the assessment order, and once, the assessment order and the basic additions goes, the penalty has to go. In this regard, learned counsel relied upon judgment of Hon’ble the Supreme the penalty proceedings per-se cannot be held to be declared contrary to law. He added that the penalty has been imposed upon petitioner for furnishing inaccurate particulars.

regarding initiation of penalty proceedings has lost its feet, penalty proceedings which might have culminated into order of penalty and affirmed by the order of the PCIT, passed under Section 264 of the Act of 1961, the same cannot clear the legal scrutiny. Our afore view is fortified by the judgment of K.C. Builders (supra). We deem to appropriate to reproduce para no. 14 and 27 of the judgment of K.C. Builders (supra), below:

“14. … The word "concealment" inherently carried with it the element of mens rea. Therefore, the mere fact that some figure or some particulars have been disclosed by itself, even if takes out the case from the purview of non-disclosure, it cannot by itself take out the case from the purview of furnishing inaccurate particulars. Mere omission from the return of an item of receipt does neither amount to concealment nor deliberate furnishing of inaccurate particulars of income unless and until there is some evidence to show or some circumstances found from which it can be gathered that the omission was attributable to an intention or desire on the part of the assessee to hide or conceal the income so as to avoid the imposition of tax thereon. In order that a penalty under section 271(1) (iii) may be imposed, it has to be proved that the assessee has consciously made the concealment or furnished inaccurate particulars of his income. Where the additions made in the assessment order, on the basis of which penalty for concealment was levied, are deleted, there remains no basis at all for levying the penalty for concealment and, therefore, in such a case no such penalty can survive and the same is liable This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above.

to be cancelled as in the instant case. Ordinarily, penalty cannot stand if the assessment itself is set aside. Where an order of assessment or reassessment on the basis of which penalty has been levied on the assessee has itself been finally set aside or cancelled by the Tribunal or otherwise, the penalty cannot stand by itself and the same is liable to be cancelled as in the instant case ordered by the Tribunal and later cancellation of penalty by the authorities. …